Ihs Holding Limited · NYSE:IHS
Ihs — IHS Towers — FY2023 Earnings Presentation
56 slides from Ihs's earnings presentation, March 2024
Slide 1: 4Q/FY23 Company Presentation
IHS TOWERS 4Q/FY23 COMPANY PRESENTATION | MARCH 2024 Towers of strength
Slide 2: Disclaimer
DISCLAIMER Forward-Looking Information This presentation contains forward-looking statements. We intend such forward-looking statements to be covered by relevant safe harbor provisions for forward-looking statements (or their equivalent) of any applicable jurisdiction, including those contained in S
Slide 3: Introduction
INTRODUCTION IHS 3
Slide 4: Key Investment Highlights
KEY INVESTMENT HIGHLIGHTS Structurally strong business model with long-term contracts providing visibility Leading independent multinational TowerCo focused on Emerging Markets - #1 in Africa and #4 in Brazil(1) Highly attractive markets well-suited for organic growth Long track record for operation
Slide 5: A Unique & Compelling Investment Proposition
A UNIQUE & COMPELLING INVESTMENT PROPOSITION SCALE 40,000+ (1) #1 TowerCo (2) +780m (3) ~200,000 (2)(4) Towers In 7 of 11 Population in PoS forcast in next markets our 11 markets 5 years (2022-2027) FINANCIAL STRENGTH $2.1B (5) $1.1B (5)(6) 3.4x (1) 53.3% (1)(6) Consolidated Adjusted Consolidated Ad
Slide 6: IHS Global Tower Portfolio
IHS GLOBAL TOWER PORTFOLIO In 2023, we built +1,329 towers (vs. guidance of ~1,250) including +812 in Brazil (vs. guidance of ~750) and +237 in Nigeria (vs. guidance of ~200) 40,075 3rd Largest Towers on 3 Continents (1) Independent Multinational TowerCo Globally By Tower Count (1) Egypt(2) - 222,83
Slide 7: Financial Overview
FINANCIAL OVERVIEW Attractive Revenue and Adjusted EBITDA growth over the last five years Revenue Adjusted EBITDA(4)(5) $M $M 2,126 (3) 1,961 48 1,133 (2) 1,031 18 (2) 48 (3) 1,580 926 18 (1) 24 +14.6% (6) 1,403 819 61 1,231 Revenue CAGR 669 2019-2023 +14.1% 2023 Organic Growth of Adjusted EBITDA 36
Slide 8: Business Growth History
BUSINESS GROWTH HISTORY IHS has a +22-year track record of successful growth Tower Builder Managed Services Specialist Tower Ownership & Colocation Africa Scale & Leadership Global Emerging Market Leader Established in #1 Independent Tower Nigeria in 2001 Company in Africa Global Expansion – Launch
Slide 9: Management Team
MANAGEMENT TEAM Founder-led management team with 150+ combined years of relevant experience X Years of experience Sam Darwish 25+ Chairman & Group CEO • Co-founded IHS Towers in 2001 • Over 25 years of experience in the telecommunications industry • BSC in Computer and Communications Engineering Wil
Slide 10: Board of Directors
BOARD OF DIRECTORS Global, experienced, and diverse board of directors; 89% independent Independent Board Members X Years of experience Board Members Sam Darwish 25+ Frank Dangeard 35+ Nick Land(1) 45+ Co-founder, Chairman & Group CEO Former Chairman and CEO of Thomson (2004 Former Executive Chairma
Slide 11: Business Model
BUSINESS MODEL IHS >
Slide 12: "DM Like" Business Model in Emerging Markets
“DM LIKE” BUSINESS MODEL IN EMERGING MARKETS Developed market operating model with exception of power in Africa and FX impacts Africa Middle East Latam US Model Long-term Contracts Limited Termination Rights Proxy of US$ contracts: Annual Escalators (1) FX Resets N/A Amendment Revenue Negligible Mul
Slide 13: High Quality, Long-Term Contracts Generating Consistent Cash Flow
IHS TOWERS STRUCTURES HIGH QUALITY, LONG-TERM CONTRACTS, WHICH GENERATE CONSISTENT, LONG-TERM CASH FLOW Significant operating leverage realized from colocation and lease amendments helps accelerate cash flow 1 Long-term Contracts Provide Certainty & Visibility 2 USD/EUR Linked Contracts with Annual
Slide 14: Significant Operating Leverage
SIGNIFICANT OPERATING LEVERAGE Significant operating leverage realized from colocation and lease amendments helps accelerate cash flow 4 Strong Economic Units 5 Growing Use Fees Through Lease Amendments UNIT ECONOMICS – GROSS MARGIN ($000s)(1) AMENDMENT REVENUE – OPPORTUNITY(2) 60-65% 1. Tenant (0.5
Slide 15: FX Resets Impact on Our Business
FX RESETS IMPACT ON OUR BUSINESS FX Resets and CPI Escalators offer effective revenue protection against the impact of currency devaluation USD FX Reset Frequency(1) 2023 CPI By Market(2) How FX resets work • A relevant portion of contracts is tied to a “hard currency” including USD and Euro • We ar
Slide 16: Oil Impact on Our Business
OIL IMPACT ON OUR BUSINESS Power Solutions as at Dec 31, 2023(1) Diesel $M Oil Impact • For the last several years, IHS 948 has added hybrid (solar/battery) 911 powered solutions. As part of our Carbon Reduction Roadmap, we expect to 819 continue to upgrade a portion 792 of towers in our portfolio,
Slide 17: Proven, Disciplined M&A Approach
PROVEN, DISCIPLINED M&A APPROACH +32,500 towers acquired in 22 transactions in 3 regions and 10 countries(1) Market Attractiveness Framework Strategic Importance of Investment to IHS Nigeria SSA Kuwait Latam Towers Investment Total Deals 6 10 1 5 Appraisal Framework (2) Total towers acquired 12,889
Slide 18: IHS Market Data
IHS MARKET DATA We are the leader in market share in 7 of the markets where we operate Country Towers (1) Towerco Market Position Towerco Market Share (2) Core Tenants (3) # out of # Major MNOs (4) Nigeria 16,395 1st 60% 3 out of 4 South Africa 5,691 1st 50% 2 out of 4 CIV 2,694 1st 100% 3 out of 3
Slide 19: IHS Markets Overview
IHS MARKETS OVERVIEW Attractive markets well suited for organic growth Population (million people) Data Usage Per SIM (GB/Month) CAGR 2022 – 2027E CAGR 2022 – 2027E 1.4% 2.3% 18.7% 25.7% 838 248 10.8 6.7 782 221 4.6 2.1 2022 2027E 2022 2027E 2022 2027E 2022 2027E All IHS Markets(1) Nigeria All IHS M
Slide 20: Our Approach to Sustainability
OUR APPROACH TO SUSTAINABILITY Sustainability Initiatives in 4Q23 Our Strategy Four-pillar Sustainability Strategy • Ethics and governance • Environment and climate change Ethics and Environment and Education and Our people and • Education and economic growth governance climate change economic growt
Slide 21: Carbon Reduction Roadmap
CARBON REDUCTION ROADMAP Our Carbon Reduction Roadmap goal is to decrease Scope 1 and Scope 2 kWh emissions intensity by ~50% by 2030. For Project Green we expect to spend approximately $217M in capex between 2022 and 2024, and to deliver $77M in ALFCF savings by 2025, a 30% IRR on the overall proje
Slide 22: Financial Performance
FINANCIAL PERFORMANCE IHS ae
Slide 23: FY23 Consolidated Revenue Walk
FY23 CONSOLIDATED REVENUE WALK FY23 Revenue $M Total Growth Total Growth +$164M or +8.4% Organic Growth +$723M or +36.9% +8.4% +$164M Organic Growth +36.9% +$723M 2,126 Organic Growth 1,961 by segment 446 +46.5% Nigeria +15.9% SSA +15.7% Latam 6.8% 13.4% 1.0% 1.3% 3.2% 3.0% 1.6% 6.5% 2.9% (31.4%) (1
Slide 24: 4Q23 Consolidated Revenue Walk
4Q23 CONSOLIDATED REVENUE WALK 4Q23 Revenue $M Total Growth Total Growth ($16M) or (3.1%) Organic Growth +$255M or +48.4% (3.1%) ($16M) Organic Growth +48.4% +$255M 526 Organic Growth 510 by segment +65.5% Nigeria +12.0% SSA +16.6% Latam 5.0% 27.0% 0.7% 1.2% 3.4% 1.6% 2.8% 6.8% 0.1% (51.7%) (1) +6.4
Slide 25: FY23 Revenue Overview
FY23 REVENUE OVERVIEW Our key customers consist of the largest MNOs in the markets where we operate FY23 Revenue by Key Customer FY23 Revenue by Segment 60% MTN 17% Airtel 5% TIM 5% 9mobile 65% Nigeria 4% Orange 24% SSA 2% Zain 1% Claro 9% Latam 1% Vivo 2% MENA 1% Oi (Fixed) 1% Telkom <1% Tigo Custo
Slide 26: Revenue and Adjusted EBITDA
REVENUE AND ADJUSTED EBITDA Annual Revenue +14.6% Quarterly Revenue $M CAGR 2019-2023 $M 2,126 603 1,961 41 36 200 46 10 546 526 160 10 10 510 1,580 44 48 467 11 503 122 54 1,403 29 413 10 22 (2) (3) 117 (3) 123 52 1,231 344 60 18 48 48 124 30 (1) 313 24 133 305 1,352 1,334 1,382 1,334 425 377 1,147
Slide 27: Adjusted Levered Free Cash Flow and Capex
ADJUSTED LEVERED FREE CASH FLOW AND CAPEX Annual Adjusted Levered Free Cash Flow(1) Quarterly Adjusted Levered Free Cash Flow(1) $M 433 (3) $M 43 155 363 (2) 43 (2) 18 118 97 86 74 2022 2023 4Q22 1Q23 2Q23(4) 3Q23(4) 4Q23 ALFCF Cash Conversion Rate +35.2% +38.2% +35.6% +46.2% +26.0% +36.0% +43.1% No
Slide 28: Debt Profile
DEBT PROFILE Consolidated Net Leverage Ratio Debt and Net Leverage Debt Maturity Profile(3) as of Dec. 31, 2023 $M 3.4x $M As of Sept. 30, 2023 As of Dec. 31, 2023 8.000% Senior Notes due 2027 940 940 1,118 • Continue to target net leverage 5.625% Senior Notes due 2026 500 500 ratio of 3-4x 133 6.25
Slide 29: ROIC and Capital Allocation
ROIC AND CAPITAL ALLOCATION ROIC(1)(2) FY23 Capital Allocation $M ROIC As of December 31, 2023 14.6% 14.6% 12.4% In 2023 11.0% $600M • Operating Profit grew ~70% 9.9% Capital Allocation 10.0% FY23 • Built 1,329 New Sites for $92M • Invested $103M on Project Green • Continued to build out I-Systems n
Slide 30: Key Performance Indicators
KEY PERFORMANCE INDICATORS 30
Slide 31: IHS Towers Key Performance Indicators
IHS TOWERS KEY PERFORMANCE INDICATORS Towers – Annual +13.6% Towers – Quarterly 2019-2023 CAGR 40,075 40,075(1) 39,652 39,739 31,043 39,652 27,807 39,298 24,076 39,104(1) 2019 2020 2021 2022 2023 4Q22 1Q23 2Q23 3Q23 4Q23 Tenants – Annual +12.2% Tenants – Quarterly 2019-2023 CAGR 59,727 (1) 59,727 59
Slide 32: IHS Towers Key Performance Indicators
IHS TOWERS KEY PERFORMANCE INDICATORS Lease Amendments – Annual +28.1% Lease Amendments – Quarterly 2019-2023 CAGR 36,603 36,603 31,674(1) 35,254 27,124 34,234 17,983 33,038 13,604 31,674 2019 2020 2021 2022 2023 4Q22 1Q23 2Q23 3Q23 4Q23 Lease Lease amendments 3,621 4,379 9,141 4,550 (1) 4,929 amend
Slide 33: Markets
MARKETS IHS =~
Slide 34: Nigeria
NIGERIA Entered Market in 2001 | #1 Independent TowerCo | 16,395 Towers (as of 4Q23) Nigeria is the largest country in Africa by GDP(1). The country has a population of 221 million and is expected to grow to 248 million by 2027. Nigeria’s real GDP is expected to grow at a 3.0% CAGR over the next fiv
Slide 35: South Africa
SOUTH AFRICA Entered Market in 2022 | #1 Independent TowerCo | 5,691 Towers (as of 4Q23) South Africa is the 3rd largest country in Africa by GDP(1). The country has a population of 60 million and is expected to grow to 63 million by 2027. South Africa’s real GDP is expected to grow at 1.5% CAGR ove
Slide 36: Cameroon
CAMEROON Entered Market in 2013 | #1 Independent TowerCo | 2,358 Towers (as of 4Q23) Cameroon is the 17th largest country in Africa by GDP(1). The country has a population of 28 million and is expected to grow to 32 million by 2027. Cameroon’s real GDP is projected to grow at a 4.6% CAGR over the ne
Slide 37: Côte d'Ivoire
CÔTE D’IVOIRE Entered Market in 2013 | #1 Independent TowerCo | 2,694 Towers (as of 4Q23) Côte d’Ivoire is the 11th largest country in Africa by GDP(1). The country has a population of 29 million and is expected to grow to 32 million by 2027. Côte d’Ivoire’s real GDP is projected to grow at a 3.9% C
Slide 38: Rwanda
RWANDA Entered Market in 2014 | #1 Independent TowerCo | 1,434 Towers (as of 4Q23) Rwanda is the 32nd largest country in Africa by GDP(1). The country has a population of 14 million and is expected to grow to 16 million by 2027. Rwanda’s real GDP is projected to grow at a 6.7% CAGR over the next fiv
Slide 39: Zambia
ZAMBIA Entered Market in 2014 | #1 Independent TowerCo | 1,879 Towers (as of 4Q23) Zambia is the 19th largest country in Africa by GDP(1). The country has a population of 20 million and is expected to grow to 23 million by 2027. Zambia’s real GDP is expected to grow at 4.5% CAGR over the next five y
Slide 40: Brazil
BRAZIL Entered Market in 2020 | #4 Independent TowerCo | 7,663 Towers (as of 4Q23) Brazil is the largest country in Latin America by GDP(1). The country has a population of 216 million people and is expected to grow to 221 million by 2027. Brazil’s real GDP is expected to grow at a 1.7% CAGR over th
Slide 41: Colombia
COLOMBIA Entered Market in 2020 | 228 Towers (as of 4Q23) Colombia is the 4th largest country in Latin America by GDP(1). The country has a population of 52 million people and is expected to grow to 53 million by 2027. Colombia’s real GDP is expected to grow at a 2.7% CAGR over the next five years.
Slide 42: Peru
PERU Entered Market in 2020 | 61 Towers (as of 4Q23) Peru is the 6th largest country in Latin America by GDP(1). The country has a population of 34 million people and is expected to grow to 35 million by 2027. Peru’s real GDP is expected to grow at a 2.8% CAGR over the next five years. MNOs/Other st
Slide 43: Kuwait
KUWAIT Entered Market in 2020 | #1 Independent TowerCo | 1,672 Towers (as of 4Q23) Kuwait is 8th largest country in the Middle East by GDP(1). The country has a population of 4 million people and is expected to grow to 5 million by 2027. Kuwait’s real GDP is expected to grow at 2.5% CAGR over the ne
Slide 44: Financial Reconciliations
FINANCIAL RECONCILIATIONS 44
Slide 45: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION Reconciliation from profit/(loss) for the period to Adjusted EBITDA 3-month period ended LTM as of LTM as of LTM as of ($000s) Dec 31, 2022(1) Mar 31, 2023 June 30, 2023(2) Sep 30, 2023(2) Dec 31, 2023 Dec 31, 2022(1) Sep 30, 2023(2) Dec 31, 2023 Profit/(Loss) (268,863
Slide 46: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION Reconciliation from profit/(loss) for the period to Adjusted EBITDA 2019 2020 2021 2022(1) 2023 ($000s) Profit/(Loss) (423,492) (322,682) (26,121) (468,966) (1,988,178) Divided by total revenue 1,231,056 1,403,149 1,579,730 1,961,299 2,125,539 Profit/(Loss) margin (34%
Slide 47: Adjusted Levered Free Cash Flow Reconciliation
ADJUSTED LEVERED FREE CASH FLOW RECONCILIATION Reconciliation of Cash From Operations for the period Adjusted Levered Free Cash Flow 3-month period ended ($000s) Dec 31, 2022 Mar 31, 2023 June 30, 2023(1) Sep 30, 2023(1) Dec 31, 2023 Cash from operations 289,277 251,859 259,098 229,912 162,054 Net m
Slide 48: Adjusted Levered Free Cash Flow Reconciliation
ADJUSTED LEVERED FREE CASH FLOW RECONCILIATION Reconciliation of Cash from Operations for the period to Adjusted Levered Free Cash Flow 2022 2023 ($000s) Profit/(Loss) 966,874 902,923 Net movement in working capital 46,240 224,982 Income taxes paid (51,245) (45,411) Withholding tax (1) (116,147) (11
Slide 49: Reconciliation of Return on Invested Capital
RECONCILIATION OF RETURN ON INVESTED CAPITAL Reconciliation from profit/(loss) for the period to Adjusted EBITDA and Return on Invested Capital 2019 2020 2021(1) 2022(1) 2023 ($000s) Profit/(Loss) (423,492) (322,682) (26,121) (468,966) (1,988,178) Adjustments - - - - - Income tax expense 13,518 169,
Slide 50: Consolidated Balance Sheet
CONSOLIDATED BALANCE SHEET ($000s) 2019 2020 2021(1) 2022(1) 2023 Non-current assets Property, plant and equipment 1,537,155 1,438,040 1,714,261 2,075,441 1,740,235 Right of use assets 369,862 468,130 520,651 965,019 886,909 Goodwill 518,141 656,256 779,896 763,388 619,298 Other intangible assets 44
Slide 51: Consolidated Statement of Comprehensive Income
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ($000s) 2019 2020 2021(1) 2022(1) 2023 Revenue 1,231,056 1,403,149 1,579,730 1,961,299 2,125,539 Costs of sales (810,967) (838,423) (907,388) (1,157,001) (1,183,306) Administrative expenses (556,285) (236,112) (336,511) (501,175) (404,783) (Net loss all
Slide 52: Consolidated Statement of Cash Flows
CONSOLIDATED STATEMENT OF CASH FLOWS ($000s) 2019 2020 2021 2022 2023 Cash flows from operating activities Cash from operations 660,025 656,699 788,073 966,874 902,923 Employee long term retirement benefits (112) - - - - Income taxes paid (13,396) (14,540) (29,147) (51,245) (45,411) Payment for site
Slide 53: Glossary of Terms
GLOSSARY OF TERMS IHS a)
Slide 54: Glossary of Terms
GLOSSARY OF TERMS Adjusted EBITDA (including by segment): Profit/(loss) for the period, before income tax expense/(benefit), finance costs and income, depreciation and amortization, impairment of withholding tax receivables, business combination transaction costs, impairment of property, plant and e
Slide 55: Glossary of Terms
GLOSSARY OF TERMS Lease Amendments: Refers to the installation of additional equipment on a site or the provision of certain ancillary services for an existing Tenant, for which we charge our customers a recurring lease fee. LTM Adjusted EBITDA: Adjusted EBITDA for the most recently ended four conse
Slide 56: IHS Towers Investor Relations
IHS Towers Investor Relations investorrelations@ihstowers.com ihstowers.com